[OPE-L:7264] Re: Re: TSS

From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Mon May 27 2002 - 19:03:55 EDT

Allin writes in 7258:

>Well, we don't have the benefit of TSS people speaking for themselves,
>but my objection (or part of it) is that the dynamics (the 'T' in TSS)
>are pseudo-dynamics.  For example, take the equalization of the rate
>of profit between sectors (or industries or firms, whatever).  Some
>people (Dumenil and Levy, Steedman) have investigated the dynamics of
>how a uniform rate of profit might be formed, starting from a
>dispersed set of profit rates.  They have posed (and attempted to
>answer) the question of whether or not this process is likely to
>  So far as I know, this sort of issue is entirely absent
>from TSS models (or "examples" -- I think they don't like to talk of
>"models").  Typical exercises from Andrew Kliman and Alan Freeman
>simply assume a rate of profit that is somehow "already" equalized
>each period.

yes this is true in what I consider to be their unpersuasive attempts 
to solve the transformation problem.  But Freeman's use of difference 
equations is not meant to explain the formation of an average rate of 
profit but rather the effect on the rate of profit from continuous or 
interperiodic productivity change. While it is true that fixed 
capital is only replaced periodically, it remains plausible that 
different firms within a branch are replacing fixed capital at 
different points while all firms are continuously achieving 
organizational and efficiency improvements. That is, there is indeed 
a continuous reduction in unit values and continuous productivity 
growth. Even Ricardo the dismal scientist did not fully appreciate 
that, according to the historian Wrigley.  At any rate, I see nothing 
wrong with the attempts inspired by Ernst to model Marx without the 
comparative static assumption of input=output prices which Freeman 
argues is less a real world assumption than a mathematically 
motivated one (it allows for the number of unknowns to be reduced).
I am more interested in TSS ideas about FROP than the transformation.

>As I have argued at length here some time ago, it seems to me that TSS
>"temporal sequences" are in fact mappings onto imaginary time of the
>iterative solution to a set of simultaneous equations.
>Further, you mention a "dynamic model _with money_".  It's not my
>impression that TSS people take money seriously.  In this respect,
>though, they are not much different from most Marxists.  I'm with
>Riccardo in thinking that Marxists have something to learn from
>Keynesians (or post-Keynesians) in this regard.

Yes but there is room for money and the monetary circuit in their 
analysis as opposed to i/o analysis which seemingly cannot make any 
more room for money than as a numeraire.

All the best, Rakesh

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